How to Run a Small Business

Four Ways to Manage Work and Achieve Goals

Everyone dreams of being the boss at some point in their lives. Controlling all the shots and setting the work schedule are just some of the benefits of running one’s own business. At the other side of the spectrum, however, is the stress of keeping work and finances flowing.

The U.S. Small Business Administration Office of Advocacy reports that there were 29.6 million small businesses in the United States in 2009. More than half of this country’s private workforce sector works for small businesses. About 7 in 10 new businesses survive for the first two years, and only about half make it to the five-year mark.

Being passionate about the business helps, but having a concrete plan is also crucial.

Create A Business Plan

A business plan is a document, or set of documents, that outlines the goals of the business, how they will be reached, and why the goals are thought to be attainable. It also provides the backgrounds and qualification of the people involved in the business. A business plan is useful as a set of self-checks on progress, and are an absolute necessity if the project will need outside financing. People thinking about starting up a business can get guidance from organizations such as SCORE, the Counselors of America’s Small Businesses.

Identify the Market

Once the business plan is in place, the next step is to conduct market research. Where can the product or service be sold? It’s critical to research the current competition and learn how business is being done in the industry sector. Is the market price-driven, or is the main issue quality? Another factor is determining the location of the business. For example, if the business is selling hot dogs from a cart, where does the cart get placed for business? If there are carts on every corner, price will be a heavy factor in success. If there’s not another cart for miles, high quality will prevail, and prices can be set at a premium. This is of course a very simple illustration, but the main points hold true.

Prepare for Lean Times

Small business owners eventually learn, often the hard way, to conserve money and prepare for slow times. For the hot dog vendor, there are less people in the street in winter, and so less money will be coming in. Some days there may be no business at all. Creating an annual budget will help. Having six to eight months of living expenses on hand at all times will get a small business over the rough spots. Driven entrepreneurs often live very frugally in the early years of their business.

Trust Gut Instinct

Gut instincts can hit small business owners at any time. It can happen in a sales meeting or during a call with a prospective customer. Something just doesn’t feel right. Most small business people pride themselves on integrity and fairness. Most, but not all. There will be a time when the gut says to walk away. And no matter how the numbers look, or how huge the potential is, the gut instinct almost always signals real danger. If possible, delay making a commitment if there’s unrealistic pressure, but pay attention to gut instincts as well.

If the dream and the drive are there, and a plan is in place, self-employment can be an extremely liberating way to live.